24th Oct 2022

Connecting the dots: Millennials and banks

We see consumers of all ages using digital channels and tools for their money management but Millennials seem to be the most active in embracing digital technologies for their banking tasks than their predecessors. This preference of Millenials is driving a paradigm shift in the banking sector, one that favours digital channels. Let’s explore how banking and financial institutions can pivot strategies entered to capture Millennials’ attention.

At present, Millennials are the largest adult generation group with average spending of USD $208.77 daily which is more than any other generation. By 2030, 80% of financial firms will either go out of business or be rendered irrelevant by new competition due to the changing customer behaviour and advancements in technology.

How Millennials are changing the financial landscape

Today’s unpredictable global economic atmosphere has had a great impact on the banking behaviour among Millennials. This customer segment prefers association with tech-driven financial institutions. Hence, 84% of Millennials use digital banking services, which is the highest percentage when compared to other age segments while only 28% of Millennials still entrust their banking activities with traditional banks.

How can banks attract Millennials?

Millennials have reached the stage where they are ready to take financial advice and banks understand that Millennials are important for their future success, they need to continue looking for critical engagement channels for this sheer group and to work hard to keep up with the digital banking trends. Indeed, Millennials are digital natives and remain willful to accept new digital services because they perceive digital banks to be more secure and accessible.

How can banks help Millennials?

The digital banking wings of banking institutions need to focus on key areas that help in gaining instant positive turnout from the Millennials towards their services. Here are some of the core areas that banks can concentrate their efforts on and make them central to the Millennials’ convenience:

Self-Service and Convenience

Millennials are looking for convenient and easy-to-use digital banking. In today’s era, big banks can win the business of Millennials only through – digital self-service. They believe in do-it-yourself and prefer to favour little human interaction when it comes to service needs. They expect self-service, which is considered to be the most important aspect of digital banking, that is 24/7 availability. Self-service on digital platforms allows users to update and perform actions from their end eventually increasing convenience and ultimately improving the user experience. You can also add financial literacy alerts every time they are logged in, making banking easier and simple to comprehend.

Integrate Automation

Automation has been of great interest in the banking sector, it reduces manual involvement and improves the quality of the service to your customers. It helps you personalize your services before the consumer needs them and based on their previous activity, you may offer additional support by automatically redirecting customers to results and information for the product and service.

Focus on Mobile Banking

The mobile app is the most convenient medium to manage your money on the go. It does not come as a surprise that 98% of Millennials rely on mobile banking apps to perform a wide range of tasks, including money transfers, viewing transaction history, and account balances as well as checking their credit score.

Prioritizing Security

Millennials prefer banks that keep their assets safe with the latest tools and practices. Financial institutions need to provide a more secure environment with the latest and relevant technology such as data analytics as well as blockchain technology to safeguard their consumer’s sensitive data and prevent them from fraud.

It’s high time to reimagine your digital banking approach

The digital banking vertical is growing at a tremendous pace and the major segment that drives its success is the Millennials. The traditional banks that are yet to undergo a complete digital transformation are struggling to connect to the Millennials due to the lack of innovation.

The diverse market segment of Millennials, equipped with massive purchasing power, expects a lot from banks and other financial providers as they are open and willing to adapt to digital and technology-based finance. To meet this generation’s demand and to expand your Millennial banking business, it is highly recommended to keep up with the digital trends that contribute to greater revenue driven by significant Millennial happiness metrics. If you aspire to know more in this regard, please visit us at www.techvista.com or our LinkedIn handle TechvistaSystems.